Richard Sheridan

How to organize humans effectively in an organisation?

How to organize humans effectively in an organisation?

Richard Sheridan

CEO and Chief Storyteller at Menlo Innovations

About Richard

Richard Sheridan is a co-founder, CEO, and “Chief Storyteller” of Menlo Innovations, a software and IT consulting firm that has received multiple awards and news coverage for its innovative and positive working culture.

Richard, the CEO of Menlo Innovations, became disillusioned in the course of his career in the tumultuous technology world. He was consumed by a single thought: things could be better. Much, much better. He had to figure something out. Why can’t a workplace be brimming with friendship, human vitality, creativity, and efficiency?

Rich co-founded Menlo Innovations in 2001 with the goal of putting an end to workplace hardship. Rich’s passion for building happy workplaces inspired him to write Joy, Inc.: How We Built a Workplace People Love, which became a best-selling and generally acclaimed book. His second book, Chief Joy Officer, proves that a pleasant and engaging leadership style is genuinely beneficial to a company’s bottom line.


Take home these learnings

1) The inception of Menlo Innovations
2) How to build a workplace people love?
3) How to manage conflicts in an open culture?
4) How to hire, retain and interview people?

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Episode Transcript:

Richard Sheridan Menlo Inno Founder of digital mortgage lender, firm Better, Vishal Garg gained a lot of attention in December 2021, when he fired over 900 employees over a Zoom video call. How would you justify that?... Somehow, it doesn’t make any sense to me… On the contrary, what we are going to talk about today in this episode about hiring, retaining, and building a workplace people love and the way they collaborate is something which would be unheard of for most of us. I promise you… Welcome, ladies and gentlemen, welcome to the podcast The xMonks Drive. My name is Gaurav Arora and our today’s guest is Richard Sheridan. Richard is a Co-founder and CEO of Menlo Innovations and the author of the book “Joy Inc- How we built a workplace people love”… I assure you, in this episode, there is learning/ insights/ experiences and wisdom coming your way every 3 minutes….so you can’t even skip any part… Let’s take a dive… 00:02 Hey, Richard, thank you so much for joining us on the podcast, The xMonks Drive. Such a pleasure having you here. 00:09 Richard Great to be with you, Gaurav 00:13 Gaurav So, Richard, for a long time, I've been looking forward to having you on this show, because of several reasons for the kind of work that you're doing in the space of software service industry, the kind of culture that you've been able to create and the generosity with which you are just sharing the best practices with the world. So, the entrepreneur, a software developer, culture creator, and let me not miss it out. The author of the book Joy Inc. And one more, let's take a dig deeper dive into knowing Richard, from the very starting. Richard, if you must share an episode from your life, from especially from your childhood days, and because right now I'm sitting in my daughter's room, Would love to hear your initial childhood days and those memories that bring a smile on your face today as well? 01:09 Richard Awesome. Yeah, well, I am, what we like to say here in my home state of Michigan, a Pure Michigan kid, I grew up in the state of Michigan, which is right up against Canada. And you can see it from outer space. Because where the, where the state shaped like a mitten, because we're surrounded by the Great Lakes. And I touched a computer for the first time when I was just a kid in high school 1971, way back in 1971, 50 years ago, the year, I touched a computer, they were very different back in those days, and I was only 13 years old at the time. But I typed in a two-line program into that computer and clacked out on a roll of paper "Hi Rich!" because that's what I told it to do. And I was hooked. I knew what I wanted to do the rest of my days, I thought this software thing would be so cool. And eventually, I went to the University of Michigan, got a couple of degrees in computer science and computer engineering, and started a career in this field. And the career looked perfect, I was very good at what I did and I kept getting raises and promotions and stock options. And you know, the world was rewarding me and telling me I'm doing a good job. But inside here, I knew I wasn't. I knew that things could be better. I was watching chaos, I was watching poor quality going out the door. I was watching everybody being frustrated. I was frustrated. I was working very long days, spending time away from my family. And we just weren't delivering good results. And I will be honest, by my mid-30s. I wanted out, I didn't want to be in the industry anymore. Because I just felt so dissatisfied and so disillusioned with my work. And my wife one day, she looked at me and she could tell I was frustrated. She could tell I was sad. And she just said to me, she said "You don't look happy." And I said, "I'm not happy." She said, "What are you going to do about it?" I said, "I don't know." I was scared, this was how I was feeding my family. This is how I was keeping a roof over our heads. And there I was well trained, pretty darn good at it and thinking to myself, I don't know how I'm going to do this for another 30 years. And quite frankly, at that point, that's when I decided I had to change. I had to make big changes. And I started reading lots and lots and lots of books. 03:57 Gaurav Wow. So, what I'm listening is creation has always been a very important part of who you are as an individual. And also what I heard you say is 04:08 a deeper need 04:11 for good quality. Tell me more about that. So, from working in an organization to starting something of your own, how was the transition for you? Because I come across so many people. And they continued to think about one day I would like to start something of my own. And especially if I go 15 years back, getting into something of your own was not that easy. It's only now everyone is talking about being a startup founder. 04:42 Richard Right? Gaurav Sure. That 04:43 was not the case. 04:45 Richard You know, I had always imagined that I would want to have my own business. I don't know why I just I do some basic entrepreneurial heart inside of me. I never imagined it would take until I was 43 years old, so 30 years since that day of touching a computer for the first time was when we started Menlo in 2001. But it was in the later stages of my career where the idea of a startup company started to come closer and closer, because in the last couple of years in my traditional job before I started a new business, I had transformed tired old public company into something that looks like this. I had gotten back to the word joy in my career. And I think I probably would have stayed there for a long time, except in 2001. The internet bubble burst. And suddenly I was out of work for the first time in my career. And I went home and told my wife, I'd lost my job. And she looked at me with tears in her eyes, and she said, "You're unemployed now." And I said, "No, honey, I'm an entrepreneur. Now, I'm going to start a new business." And she didn't know exactly what I meant at that point. But I knew that while I could lose everything. I lost job and title and authority and paycheck and stock options, all went to zero. I lost everything, except for one thing. They couldn't take away what I've learned in those two years of transforming that old public company into something that looks like Menlo does today. So, that learning was what I carried forward into this new business. And you're right, it wasn't easy. Certainly wasn't simple. But boy was I... I was so excited about this because I had seen a picture of what Menlo could be in those last two years of my old company. 06:45 Gaurav Yeah. And that is so interesting because what I just heard you say that I lost titles, I lost my job. I lost employability, I lost, of course, a monthly check, I lost the pseudo pride in saying that I'm a vice president, I'm a President, I'm sorry, I'm calling it pseudo pride. Because having known you for some time, I know, the heart that you have that beats for creativity, right? Your soul dances when it experiences freedom. What I also heard is you lost everything and you gained your freedom, right? Yes, That is right. Now, you also mentioned Richard, that you were frustrated anyways while working in those organizations. Because somewhere you will not as an organization, which you were a part of, we were not producing quality. Tell me more about that. And I'm really curious because, you know, today also, if I look at people invest a lot of time money energy on building software's, we have burned our fingers a couple of times, we invested but the end of the product, at the end of the day, the product that we got from the organization was not at all in alignment to what we were expecting or anticipating. Tell me, what was the struggle that you were experiencing? And why do you say it was not of good quality? 08:13 Richard Yeah, you know, there is probably no more exciting time for a software engineer than somebody says, We have a new project for you to work on a clean blank sheet of paper, you finally have this, like "This time, we're going to do it, right. This time we're getting get it right, this time, we're going to, we're going to make something that has great effect in the world." And I will tell you, there is no more delight in the heart of a software engineer, and to see their work, get out into the world. And delight the people. It's intended to serve so much that they come back to you and say, "I love this product. I love this thing you created, thank you, you made my life better because your work." And I'll be honest, I had all these new projects that I started where I started out with grand excitement. And I never got to that outcome. Because what would happen is, I never got to actually meet the people who would one day use the software we're going to create. And so, you'd be in a room with a whiteboard. And you'd be making all these guesses about what "I think people would really like to work like this. And I think they really like it to work like this." But you never really knew you just made you know, we were intelligent people we could sort of imagine. What would it be like to be a customer of this product? And then your planning process was so poor in those days, you know, some manager high-level man, "How long do you think it'll take?" And you'd say, "Well, I think it'll take us a year" and they're like, "Well, what could you do in six months?" You're like, "Well, I think it'll take us a year." "Yeah, but we're only gonna give you six months and how many people do you think we need?" "I think I've been about six people." "Well, we're gonna give you two people" And then they push you and push you and push you. And then they say, "Well, let's get it out the door" and you're like, "It's not ready. It's, you know, doesn't work yet." "Oh, that's okay, we'll fix it later" And later never came. And so then you ship this inferior product that didn't actually meet the needs of any users. It had bugs in it everywhere. And then the phone would start ringing off the hook with problems, angry customers, "Why does it do this, you shouldn't do this, it works like this, it lost my data, it crashed on me." And now you're spending all of your time trying to fix problems from the past. You're spending no energy going forward, no energy improving the product, just simply patching it up trying to make it work as best you can, trying to apologize to the people you intended to serve. Rather than hearing them tell you "I love this." They're telling you "I hate this, this is the stupidest product ever. I want my money back" you know, and you're just scrambling and so the only way to go faster is overtime. And now you get tired. Now you're making more mistakes along the way. And the people who were paying you to do this, your bosses were like, "I never told you to build a crappy product" which was true, they never said Build a crappy product. But there was no way to communicate to them "It's much bigger than what you think we need to do a lot more effort, we need more people." And so none of those things work." And that's where I was frustrated. You know, going home at the end of the day thinking "I got absolutely nothing done. I am not proud of the work I did. The people who work around me are proud of the work we did. The customers aren't happy with what we created, the management team that paid us to do this great work." And then eventually, many of those projects just got cancelled. The management team "Well, I guess it was a good idea. But you know, we didn't execute properly. So, we're just gonna throw this all away." And then they come back, say, "So, now we have another new project." And after a while, you're like, "No, I don't want it." Even though those new projects, again, is the spirit and energy of the entrepreneurial spirit inside of a you're like, "Oh, I get to work on something brand new, I get to change the world and what I do" And I would never get there. And I thought there's got to be a better way. 12:32 Gaurav Thank you so much. And I think that was the inception of Menlo innovations. Now, interestingly, I have been thinking for last few days, Richard, that how come a software developer rather than writing a book on how to develop software that customers love, The gentleman wrote a book on how we build a workplace people love. Very curious, because software developer requires left-brain thinking. And what you are talking about is building a workplace that people love, is the right-brain thinking or if I may say it's a whole-brain thinking? What was the trigger point for you? That led to the shift, rather than focusing on only developing world-class softwares to creating a workplace that people love? 13:36 Richard When I look back, I realized that, at a certain point, my deep trough of disillusionment, when I was thinking, "I'm just getting out of the industry entirely." I decided, there was actually a friend of mine, who was a consultant to other businesses. And she's a really good friend and I said, "Cathy, helped me what should I do?" And she started pulling books off of her shelves, "I think you should read these books." And Intriguingly, and I loved the book, she gave me books like Tom Peters In Search of Excellence, Peter Drucker, his books on management, Peter sang his book, The Fifth Discipline on the art and practice of building a learning organization. And I loved these books, they inspired me they showed me there was, in fact, companies that did succeed where I was failing. They didn't tell me how to get there. But what I recognized in those books was the problems I faced. Were not technology problems, they were human problems. How do we organize the humans more effectively? And suddenly, my personal focus shifted from being a programmer who was thinking about, you know, really important technology concepts and frameworks and structures and all that kind of stuff to a leader that was thinking about "How do we organize the humans more effectively?" And that became, by the time I was probably 36-37-38 years old, my burning passion and desire was, "I've got to figure out how to organize people more effectively." And that has become my main focus of my attention, probably since the middle 90s. And it's continued to this day. And that's why I write books about building workplaces that people love. Because here's the thing, and here's the most important thing. What does every company on planet Earth need today? They need creativity, imagination, invention, and innovation. And guess what? That comes from this really human part of our brain. And that part of our brain is the part of our brain that literally shuts down when we are afraid. When we go to reptile brain, when we're in fight or flight mode, we lose those most imaginative part of our of our humanity. And so, part of it for me was creating a joyful company, where when people walk in, they feel safe enough to be creative, imagine innovative. 16:25 Gaurav Now, help me understand. And I understand that you have been in this space for over two decades now, right? Now, Richard, help me understand, what do you think what according to you are the three most important pillars or I may use the word levers of building a culture of workplace that people love? 16:48 Richard So, number one, do whatever you can, and we can talk specifics here if you want, to keep the human energy of our team high. You think about all of the conversations that are going on in the world today about energy, whether it's fossil fuels, or solar, or wind, or hydroelectric energy, but I would declare the most wasted energy force on planet Earth today is the human energy of the people who worked for us. And the Gallup group has been measuring organizations for decades. And it tells us that 60 or 70% of people in most organizations are literally disengaged at work. Imagine that the lack of everything, lack of productivity, lack of output, lack of caring about what you're doing, if you don't have human energy about what you're doing. And you know what? all of us, you know, you might hear and say, "Well, what does he mean by human energy?" You can walk into a company and literally feel the human energy of the place. It either sucks the life out of you, because there's no energy at all. And you're like, I don't even want to be here. Or you walk in you like, "Wow, I want to work here. Right?" Imagine what an attractive force this is everybody's struggling with? How do we get new people to join here? How do we solve the talent war that's going on around the planet, lift up the human energy of your team. Now, one of the ways to get there is to decrease the bureaucracy of our organizations. Don't form committees to write policies take action versus take news, be clear, unambiguous, give people a chance to go to work and get meaningful things actually done. And then the other force and I use the force of work on an aeroplane is as the analogy for this. So, there's that lift of human energy, overcoming the weight of bureaucracy, and then the thrust of purpose. An externally focused purpose, it's clear to everyone why are we doing what we're doing? Who are we doing it for? What would delight look for the people we intend to serve? That thrust of purpose overcoming the drag of fear, I will tell you most organizations operate. 19:18 Gaurav: Wow. Wow. Wow. Tell me more about that. When you're talking about the thrust of purpose is going to overcome fear. The moment you said that I could actually experience goosebumps, tell me how can we actually help our teams to imbibe the purpose? And that could allow them to overcome the fear, which might be created by bureaucracy? Or we might have our own fears, our own insecurities, right? really curious. Tell me more about that. 19:50 Richard So, think about how many of us and this would certainly include me, were led within our organizations. It is Often with fear, right? We use fear to try and motivate people. Right? You start, you know. There's this famous story of some boss that just fired 900 of his employees through zoom the other day, you don't think that generates fear within an organization and next time the boss invites you to a meeting, you're like, "Oh my gosh" Gaurav: Of course. Richard: And so we often invent fear in order to motivate people. We artificially motivate people, I had a boss once, who when I worked in a cubicle back in those days on a Friday afternoon, about 4:45, just before quitting time, he would pop into my cube, say, "How's it going? What are you working on?" "You should know what I'm working on." I mean, we give them a status report every morning. But then he asked the key question, "You almost done?" And the answer was, "Well, I'm a little bit behind." "Are you coming in this weekend?" And of course, the answer had to be "Yes, of course, I'm coming in this weekend" Which I had no plans to do, because I wanted to spend the weekend enjoying my family and that sort of thing. But when I left the office that Friday afternoon, I could feel this heaviness in my chest, because he was able to deliver that fear on a regular and consistent basis. And now all I'm thinking about is, how do I get him off my back? How do I make sure you know, and of course, he's like, "Wow, that's the way you motivate people?" No, it's not. I wasn't motivated at all. 21:38 Gaurav Yeah, yeah. And that's exactly what you mentioned, when you mentioned that, when the reptilian brain has been hijacked, it actually hampers our creativity or innovation our the creative juices to flow through us. 21:56 Richard Yeah. Yep. And so, now we're just trying to survive. Now we're trying to look good to the boss. Now we're trying to put in face time in order to make sure there's no creativity, there's no human energy there. There's no deep desire, and there is no connection to the purpose of the organization. In fact, you know, often the worst purposes in an organization are the ones where it's tied to some financial results, that will only enrich the founders or the shareholders. So, it's like "Okay, what kind of purpose is that?" I often challenge organizations to think about this when it comes to their purpose. Two questions. Who do you serve? And what would delight look like for them? 22:38 Gaurav Who do you serve? And what would delight look like to them? 22:43 Richard Yeah. And refocus purpose can really, really motivate a team and take them through very tough times. 22:57 Gaurav Richard, just curious, How do you ensure and I would love to listen to the other levers as well. But let's take a deeper dive into the energy part that you're talking about, the dance of fear and purpose in an organization? I'm just curious how as a leader, do you ensure that the complacency does not seep in, in the culture? 23:21 Richard You know, I think, for me, storytelling is a big part of leadership. Because often, the reason people get complacent, I believe is because they become disconnected from a purpose, they can no longer relate to that purpose, they can't see themselves making a contribution to the purpose they're trying to create in the world. And typically, this happens when every quarter this the top leaders, the CEOs, the executives are presenting PowerPoint presentations with bar graphs, charts, and spreadsheets, and they're trying to improve performance and key performance indicators by 1.3%. And all that kind of stuff. I was like, people are like, "I mean, I can't help there. I can't move that needle, I can't make a contribution to make a difference that why should I care?" And then I start becoming complacent, then I start just putting in, you know, FaceTime and then I'm just, you know, going through the motions. Whereas, through storytelling, we can start to tell stories of the people we intended to like, we can tell a story about the future deliberate innovation. Storytelling is as old a tradition as humanity, right? Every culture on planet Earth has stories of their founding, of their civilization, their accomplishments, of their failures, right? We need to keep track of all these stories. And in history, we tell these stories again and again. And what are we doing? We're talking, we're telling stories about what do we believe about ourselves, as a people, as a nation, as a community as a team, what do we truly believe? And as a leader, if I can connect to your soul, and spirit, through the words of a story, because stories, it's less important that you remember the stories, it's far more important. How did the stories make you feel? And if we can tell those stories over and over and over again, over time, collecting more stories as we go, Gaurav wow, wow Richard clear about the future, we can motivate a team. Gaurav Now, this is what is 25:49 happening at the team level. Now, I'm sure even you would have your investors, you would have your stakeholders, if not investors, you would have your board members. How do you ensure that the energy is taken care at that end as well? 26:05 Richard Absolutely. Well, number one, you need to learn how they think, you need to see the world through their eyes, I will tell you this happened. And there's a story inside of Joy Inc. On this particular story. When I wanted to make the changes I wanted to make back at my old company, when I was a VP of R&D. I kept going to my boss, the CEO, his name is Bob Neuron. And I went to Bob and said, "Bob, I want to do all these really cool technical things with my team." And he would ask me how much it was going to cost. And he'd say, "We don't have time for that, you know, just go back to work." And I wasn't getting through to him. And then one day, I came and I told him the story of what I was going to accomplish, through his lens, through his eyes. I said, "Bob, I've been sitting in on the executive team meetings of the company because I was on the exec team. I was sitting through board presentations because we were a public company. So Bob, I know we are going to run out of cash, before my team completes its work, and builds the new products you want me to build for the next generation of this company." And he said, "Yep, I know that Rich. And I said, "When a company is going to run out of money, there are three alternatives, they have to make sure they don't: They can be acquired. They can do a secondary public offering issue more shares for cash. Or they can have a private equity firm come and put money in." And he said, "Yep, those are our three alternatives, Rich" Now realizing I'm not talking like an engineer anymore. I'm talking like a business person. I'm like an executive. And I looked at him and I said, "Bob, any one of those transactions, secondary public offering, acquisition, or private equity firm, they are going to send a due diligence team to the company. And because we're a tech firm, because the greatest amount of people and budget is being spent in my division, they are going to walk down the corridor to me and my team, and they're going to look at my people, my process and my products. And we are not going to pass muster, that we will not get that money. And we will go out of business. That's why I need to make the changes I'm about to make." And at that point, he literally signed off on the deal that afternoon. What did I do? I told a story to him. That actually came exactly true six months later. And it worked. They acquired us because they came down to my end of the building, they looked at my people, my process and my products. After all the changes I've made, they say, "Wow, this is mind blowing what you've done here, we want to buy you" And they did a buy for 10 times the amount of share price that when I had that conversation with Bob, just six months before, so came exactly true. But I had to move my leaders with this story. And I had to learn to tell the story in terms they understood. 29:15 Gaurav: Yeah, so what I understood is, in order to manage the energy, whether we are talking about the team who is reporting into me or my stakeholders or my board of members. One thing that's definitely going to make a shift in terms of taking the energy to the next level is storytelling. Now the difference is when you're telling a story to your team member, it's about the purpose where we are sipping towards where we are navigating towards where we are moving towards our aspiration. As you mentioned, what do we do? Who do we serve? What would delight look like to them? So that's the team part of it. When you're talking to the stakeholders, looking at the business, from their worldview, what is it that they are looking forward to? And how can I contribute in that journey as well? So Richard, that's the energy part of it right? Now, what are the other pillars or other levers that could help the culture to build a workplace that people love? 30:34 Richard Well, you know, I always say, if you want to pull the human energy out of an organization, there's a simple three-step process number one, have lots of meetings. Number two, do not make any decisions in those meetings. And number three, if perchance, by mistake, you happen to make a decision, that's okay. Just don't act on it. And you will suck all of the human energy out of your organization. And so, what I encourage people to do is to take action, versus take a meeting, try things run the experiment is one of the most famous phrases we have here at Menlo. Because running an experiment gives people permission to make mistakes, to make small, quick mistakes. Mistakes are often punished, aren't they? "Don't dare make any mistakes, do everything perfect." Well, if the requirement is to do things perfectly, then we better spend a tremendous amount of time in meetings, planning everything. But we're human. We're going to make mistakes. I don't care how perfectly you plan things, things are going to happen. We didn't expect. So, why don't we just embrace our humanity? Why don't we say to ourselves, "You know what? we can either choose to make really big, slow, expensive mistakes, or we can choose to make very tiny, simple, correctable mistakes in our way to success." So, our phrase for that is when somebody has a new idea, and somebody else is "Well, I'm not sure that'll work here. I think we should think hard about that." The other person say, "I get it, but why don't we try it before we defeat it?" 32:18 Gaurav You know, this is like a friend of mine. His name is Chris. And one thing that I've learned from him is "Fail, fail again, fail faster, fail better." And when I heard it for the first time, I said, "Why would you want to fail?" And when I started running my own organization, I realized how important it is to experiment. Because unless I experiment, I would not know, what are the ways I should not do something. And if I don't know how not to do something, I will never get to know how I should do something. 32:54 Richard Well, think of all the ideas you've had, where you can imagine every one of us can do this, right? You think, "Oh, I'm going to try this now. Oh, I don't know this could happen, this could happen. Or this could happen. Or this could happen" Right? You know, what's funny about those, 'this could happens' ?. Fortunately, none of them ever happen. Now, there's something that's going to happen, you didn't even anticipate it might be just equally as bad as the things you are worried about. But we're not going to learn. And so, then you know what we do as "Well, okay. I still like the idea. So, let's create all these safeguards against the four things that I know are going to happen that we've got to prevent." And you start building this really complex approach to this simple idea you had, so you don't have the fourth thing. And then that thing that you never anticipated happens, right? "Aww, my whole system" will tell you why. And I'm going to, I'm going to suggest a different language than your friend Chris's language. And here's the reason why I don't like the word failure, or even fail, because at least here in the United States, in school, a failure is on your permanent record. It goes on your report card that goes in your file, and you'll be seen forever and ever as someone who failed at something. And we're so wired to avoid failure that we just don't, we're so afraid of it. We just self we create fear inside of ourselves from failing. But here at Menlo, instead of saying fail faster, we say make mistakes faster. Gaurav Wow. Okay. Richard The language I think sometimes can be very important. If people said "Well, it's just a mistake" because what can you do with mistakes other than correct them? That's why I like experiments this way, like the word experiment means you try something, you see what happens and if it doesn't happen the way you want. You would just try something new, and keeping things tiny. That's why I like faster. So, I agree with your friend Chris about that is don't create big small mistakes that are gonna get really expensive. And we're gonna fire a bunch of people because they made that mistake. Let's make small quick mistakes. Let's try little things. 35:10 Gaurav Got it. Got it. So, what I'm listening is Richard, the first lever or the pillar of building a workplace that people love is to take the energy to the next level, both at the end of your team members and at the end of your stakeholders. Second point is celebrate experiments, celebrate mistakes, is my understanding, right? What is the third lever? 35:42 Richard Pump fear out of the room. And this could be a career for most leaders to change themselves. Because I will tell you, I learned how to motivate people with fear because I was motivated, you know, I was taught to be motivated by fear, right? So, I bring that myself into my managerial career, when I started leading people, it's like, "Okay, I've got to make you afraid, because that's what my boss did with me." And so, there are many ways we do this here at minimal, I'll tell you some point, I sit out in the room with everybody else, no corner office, no barriers between me and the rest of the team. It doesn't mean people stare on or are afraid of the person with the CEO title, I get that. But I can knock down a lot of those fear-based barriers if I knock down some of the physical barriers between me and the people who work with me, right? So, I sit down in the room at the same five-foot table that everybody else does here. No gifted C suite for the CEO and co-founder of the company. No difficult, you know, process to get on my calendar. It's amazing, right now, I have two of our newest employees sitting in the same group of tables where I sit. And I've heard them say it like, I can't believe I get to sit like right next to the CEO of the company, right? I go "I'm right here" you know. And yeah, you know, if we continually knack down these barriers to making ourselves accessible and implement it. And then the other thing is teaching the team not to punish mistakes. 37:21 Gaurav So, pump the fear out. And you also spoke about creating an open culture and in literal sense, in terms of the physical, there should not be any boundaries. You know, Richard, I got it when you're talking about creating an open culture. But at the same time, when you build an open culture, I personally come across there's so many conflicts that start to show up. And conflicts that could be based on the ideas that people would come up with different ideas, people who have different values that we operate from, people might have their own fears, and they will project their fears onto somebody who they believe is much smarter than them. How do you manage those kinds of conflicts in an open culture? What is your recipe for the same? 38:11 Richard Well, I often say that a lot of the challenges that we face here at Menlo are the same challenges every organization faces, we just discovered them sooner. Because conflict is a natural outcome of humans working together, right? We don't change that here. We are regular people who have our own ideas and have our own egos and all that kind of stuff. But I think we discover the conflicts sooner, we can correct them. While they're still small, one of the biggest problem with conflict inside of our organization when it's allowed to have this sort of fester and blaze out of control, and now you've got a five-alarm fire on your hands. And you know, nobody can solve it. And about the only way to do it is fire 20 people in order to get rid of it. And then, of course, you just duplicate it again and again and again. And what I would say and maybe it's another lever in your words, is to create an intentionally joyful culture. I will simply say the word intention is really important. Most companies do not have an intentional culture. They have what I call a default culture. Who did we hire? What attitudes do we tolerate? What behaviours walked in the door this morning, and that's our culture. Sometimes those can work and then one day they don't, nobody knows why they work before and nobody knows how to get it back. But when your'e intentional, it means you can tell stories about your culture, you can see the values at work, you can see when they're not at work. And if you teach a strong system of feedback, and set clear expectations during the entire history of the HR process. For instance, how do we recruit? How do we interview how do we select? How do we onboard? How do we promote? How do we get feedback? all of these things are very, very intentional here. So intentional I could write a book about it. So intentional I could speak to someone on a podcast about them. Imagine somebody in your audience says, to, you know, it says to themselves after they hear this podcast, "I want to go work from him. I want to be part of their company." Well, what if they already learned just by listening to the two of us? And then what are they going to do when they arrive to interview? They should be doing what everybody should be doing, comparing. What did I hear in that wonderful podcast versus what am I seeing in the behaviours of the people I'm interviewing? Is there a consistency? Because humans are really good at seeing differences between what people say. And if you go into a company that has this great poster and says, "We have a wonderful culture" And then the first thing you do is get in there? You see fear and intimidation, all that kind of stuff? "Wow, it doesn't sound anything like the culture they haven't poster. Doesn't sound anything like that guy who was on the podcast" Don't go there. You should not join a company that has that inconsistent and culture that the public version of the culture is different from the inside reality. 41:24 Gaurav Yeah, yeah. Yeah. So, we have already spoken about the three pillars. So, the three levers of building a workplace that people love. And let's double click on that, how can we actually put it in action? So, you spoke about, how are you hiring? How are you retaining? How are you interviewing people? How are you promoting people? What kind of behaviours are we celebrating? Or when are we asking people to move on? Right? Tell me more about that. Yeah, 41:59 Richard yep. So let's talk first about the culture they're joining, right? Not just in an open room. But two people working together, side by side all day long at a single keyboard and mouse. All of our work here is done in pairs, two people, two people, one computer, one keyboard mouse sitting next to each other, working together, problem-solving together all day long. And these pairs are assigned. And we switch them every five working days. So, if you and I are paired together this week, we wouldn't be paired together again next week. So, okay, so picture, that's the way we work. That's our culture. Those are some of our practices here, is this idea of two people pairing together. Now, how would you interview based on that culture, right? Because it's so different. I will tell you virtually no one who's ever worked at Menlo has ever worked in an environment like we, they've never done, maybe they've collaborated with some people. But I'm talking eight hours a day. Two people paired together. And then switch the pairs every five days. So, how would you interview? Well, first thing we do, we invited group of people in all at once into a big open room. Sound a little familiar? We'll invite 30 or 40 or 50 candidates in all at the same time, all in one big open room sitting nearby. And then, we've warned them about this. So, they're not surprised by what I'm about to describe. But I still think they're surprised even though they've read about it, they've heard about it so on. Then we pair them together with another candidate. And we give them the weirdest instructions you will ever hear in an interview. Your job is to help the person sitting next to you get a second interview, even though they're competing for the same position you are. So, imagine this, you're in an interview, you want to get the job you've heard about sorry, "I want to join Menlo. And these weird people from Menlo are like, 'Okay, we're gonna pair you with another candidate who's competing for the same position you are. And your job is to help the person sitting next to you get a second interview." Well, you know what people are thinking like, "Oh, no, I want the second interview." And if their behaviour is to diminish the person sitting next to him, if their behaviour is to overpower them to answer every question, grab the pencil out of their hand and, you know, intimidate them and make sure everybody's paying attention to me. Ain't gonna make it 44:45 Gaurav So, it's like, assisting others, supporting others over your expertise. 44:53 Richard Yeah. And so, many we're doing we are teaching our culture from the moment of first contact because this is our expectation what you join. And I will tell you that people who join a company often don't get any expectations set. What are we doing? We're setting clear, rational, reasonable, sensible expectations for people. And guess what? When you do that they adapt. Now, is this for everyone? Of course, we're not trying to be all things to all people. 45:36 Gauarv Yeah. Did you say it's for everyone? So I mean, even if you're hiring somebody at a vice president, President, director level somebody at a senior level, the person has to go through the same process? Richard Yep. 45:49 Gaurav Wow. Richard And interestingly, we don't have those titles here. We don't have bosses here. So, that's a whole other realm we could get into. But anyways, yes, we go through the same process for everyone. Because we're trying to be intentional about our culture. Why wouldn't we want to teach people our culture when we started interviewing? When are they supposed to learn it? Like in some training class after they hire in? All of a sudden they're like, "Oh, my gosh, I didn't know it was gonna be like this. Oh, no!" This is the way it's gonna work. 46:21 Gayrav Help me understand you said, we don't have titles in the organization. 46:25 We don't have bosses. There's no reporting. Nobody here could say, "Oh, that's my boss." 46:30 Gaurav Then how does that work? 46:33 Thast's a good question. So, everything here. So for instance, what does a boss usually do boss makes hiring decisions right? Here, the team makes the hiring decision, because what's happening in those extreme interviews, I talked about two people sitting side by side, collaborating with one another, a team member Menlonian as we like to call ourselves, is sitting across from them taking notes about what they see. And then those 30 or 40 people, let's say there were 40 of them, there would have been 20 of my team members watching the 40 because they're all working in pairs. So, each one of my team members would have seen three different pairings so six different people. And then they get together as a group and talk about what they saw. And then they decide as a group, who should advance to the second stage of the interview process. The second interview, that person who made it through, who was selected by their future peers, remember, no boss is making decisions here. His decision made by the team as to who should advance to the next level, is going to come in for a day by themselves and pair in with one Menlonian in the morning and a different one in the afternoon, and go out to lunch with a few Menlonian. And at the end of that day, the people they went out to lunch with and the two people they paired with are going to decide should we advance that person to the next stage of the interview, now they come in for a full day, so we actually pay them for that day, because that's a lot of time. So, we give them a small amount of money to come and be with us for a day and they do real work, not just talk to people, not, you know, all these crazy interviews and rooms and talk about how many golf balls can fit in us, Menlo, and they actually come in, and they do real work for a day and they get to experience what's it like to work here, Lollywood here. And then if that works, they are invited in for a paid three-week trial where they will pair with at least three different peers over the course of the next three weeks. And they start getting feedback and how they're doing, well, who's giving them feedback, their peers are, not a boss. It's all done by the team. And then the team has. So we're public with our pay levels. So, everybody here knows what everybody's making. Again, that's a crazy concept that pumps a lot of fear out of the room. So, everybody here knows what everybody's making. And the only way you make more money here is to get to move up to the next level. And the only way that happens is through peer evaluation. Because who better to judge that? 49:13 Gaurav Your team members? Yeah. Yeah. You know, interestingly, what I'm also listening in this way, you're not only strengthening the culture of collaboration in the system, in the organization, but also you are actually taking the collective intelligence of the team to a very different level. And because why am I sharing this because in my limited understanding, whatever little work that I've done with service, software service companies, they will say, "Hey, there's one person who knows the entire process from A to Z." And when that person leaves, there is a vacuum in the system. All those projects that go for a toss, and I think in this way, they'll be able to take care of the collective intelligence and the knowledge transfer would happen on daily basis like upgradation happening of the team on daily basis, 50:00 Richard Make people grow faster in an environment like that because they're learning so much. 50:10 Gaurav And I'm curious, because I'm sure people might not say it, but they have their own challenges. They have their own fears, and they have their own insecurities. I personally call them passive-aggressive behaviour, when they might not speak anything, and they would carry that in their heart, they would keep that in their heart. How do you manage that? Because I think if I'm able to sustain in a culture like Menlos, I'll become a better human being. It will allow my fears and my insecurities to meltdown. What do you think? What is the role of a 50:48 Richard What awonderful statement to make about a company culture is that it makes the people inside the culture better people. I think we've seen that. And I will tell you that this is where compassion for your fellow human being comes in. Most of us know. When the person sitting next to us is upset about something. We know it, we might not be willing to speak to it, we might not be willing to open our mouths and say, "Hey, you seem to be really struggling right now." Well, we've taught our team some very simple measures when this happens. Ask a simple question. "Are you okay?" So, let's because a lot of times when we're in conflict, another human being guess what we want to do? We make it about us? "Hey, you really hurt my feelings? Let me tell you how you hurt my feelings" You know, and all that sort of thing. Why don't we make it about the other person first? That happens to be the outward mindset as the Harbinger Institute refers to. 51:45 Gaurav Absolutely. Absolutely. Richard The other person 51:49 say, "Are you okay?" And then guess what? When you ask that question, listen, close your mouth, open your ears, open your heart to the other person. Now, if they say "No, I'm fine. Why? What's going on?" Well, now the next assumption is, maybe it was me. Say, "Hey, this thing happened yesterday. And let me tell you how it made me feel. Did you intend to do that?" Right? In other words, I might have just simply misinterpreted things, right? And so, if we can learn, and again, it's not that I, I make it sound so easy. 52:31 Gaurav It's not that easy. I know it 52:33 Richard I mean, we are brought up in an environment where we don't share feelings, or if we get hurt, our first intention is to hurt the other person first. I mean, this is these are conflicts as old as humanity, right? I mean, these are conflicts that go between nations for hundreds of years. And so, but if we teach our team simple constructs, and we give them a chance because we pair, we give them a chance to practice these constructs. Maybe every single day, guess what? there's growth, there's improvement. There's a blossoming of a culture, not a wilting of culture. Gaurav Yeah, yeah. 53:13 And also, I would add one more word here. There would be connection. 53:19 Richard Relationship. Gaurav Absolutely. Richard Dare I say a word that doesn't usually want to come into the workplace? There might even be love. 53:29 Absolutely. Absolutely. I was about to add that word. And as as Mister Chief Joy officer of the organization, Menlo innovation, Richard talks about what a joy it was listening to you, Richard, thank you so much. 53:47 Richard You did a wonderful job interviewing me 53:52 Gaurav Thank you. Richard, if you were to give a piece of advice to people who are blessed to have an opportunity to lead a team, lead an organization, I'm not using the word founder, CEO. I'm not using the word who are entrepreneurs, or who have the confidence or drive to lead an organization because I feel all these words have got some element of ego attached to that. I'm saying what piece of advice would you like to share with them with all those people who have been blessed and who have been given an opportunity to lead a team lead an organization and serve them? 54:35 Richard Yeah, I will simply say that, you know, when I give a lot of talks, I see people in the audience leaning over, talking to the person sitting next to and I know what they're saying. They're saying, "Boy, do I wish my boss was here to hear this. Do I wish so and so was here to hear this. No, the words I share are personal to each and every person in the audience. I had to start here, I had to become a different kind of leader. And I had to fight all of the lessons I learned up to that point in my career, to learn how to not be the number one hero and to not have my voice drown out the voice of understand, I try and be seen as the most important person, to become that servant leader that we always talk about. And I think even if you think back to the way we interview here, it sets the stage for that. And each one of us can do this. When you step onto the stage of your company, realize that you are the least important person here and your job is to help support and help everyone else around you succeed. And if we step onto the stage of our companies, no matter where we are, here's my most important lesson I taught the world from my talks is: You don't have to change the world. You just have to change your world. And that change begins inside of you. First, if you become a different kind of leader, a different kind of person, people around you will start to notice who you've become, they will start to want to be more like you. Gaurav Yeah, yeah. 56:15 Who you are, is how you lead remains me of what Mahatma Gandhiji said, he said, "Be the change you want to see in the world." So, Richard, thank you so much for sharing all your wisdom, all your experiences with such a joy. It's a joy talking to you always. OUTRO// I simply loved this conversation and I continued to take notes after notes… One thing that stayed with me is “Most of the challenges faced by the organizations are not technology related. They were human problems. So, the question is How do we organize the humans more effectively?... This episode reminded me of my conversation with a very dear friend Jerry Colona where he mentioned how a simple question like “How are you?” Can make people cry when asked from a space of genuine concern, genuine interest and kindness ..if you have not heard that interview you may want to listen to the same…Episode no: 44 with Jerry Colona….‘Pursuit of leadership requires pursuit of Growing up” And I look forward to meet you again next week with yet another interesting episode. Till then….Stay tuned ….stay blessed…

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